When Dubai's ruler Sheik Mohammed bin Rashid Al Maktoum realized the full extent of the emirate's financial problems it was his uncle he asked to oversee the arduous recovery process. Few people have since become as synonymous with the U.A.E.'s efforts to emerge from the most difficult chapter in its 39-year history as Sheik Ahmed bin Saeed Al Maktoum, one of Dubai's most internationally recognized businessmen and one of the most senior members of its royal family.
As head of Dubai's Supreme Fiscal Committee, Sheik Ahmed is in charge of distributing the billions of dollars of bailout money that Dubai received from Abu Dhabi. And as chairman of Emirates Group he has been at the center of rumors that Dubai's airline, along with other key assets like the huge container port in Jebel Ali, might be handed over to Abu Dhabi in return for the larger emirate's help.
Speculation about behind-the-scenes bargaining mounted in January when Sheik Mohammed shocked onlookers by renaming the world's tallest skyscraper Burj Khalifa after the president of the U.A.E. just weeks after receiving more funding from Abu Dhabi.
But according to Sheik Ahmed, sitting in his modest office on the first floor of the old Terminal 1 building at Dubai International Airport, such terms were never discussed during the bailout negotiations. "We never really talked about any of our strategic companies with Abu Dhabi," he says. "I know it's always been the rumor. When you think about what Emirates has achieved I think anyone would want to have equity in it. It's a very successful business for Dubai."
Far from handing Emirates over to Abu Dhabi, or merging it with that sheikdom's own airline, Etihad, Sheik Ahmed believes the carrier can be a catalyst for Dubai's revival. Unlike other government-owned companies in the emirate—including Dubai World and Dubai Holdings—Emirates Airline is highly profitable and isn't struggling to service its debt or secure more financing from international banks for fleet expansion.
"The airline put Dubai on the world map," he says, adding that the airline's 32,000-strong workforce makes it Dubai's biggest employer. "We've put a lot into the Dubai economy. The number of units we rent within the local market, the expenditure of the staff and how much it brings people to Dubai. If it wasn't for Emirates, this market wouldn't have been able to grow as it has. It's one of the core businesses of Dubai."
Sheik Ahmed and a close-knit group of long-serving executives—including group vice-chairman Maurice Flanagan and president Tim Clark—have built the company into a global player with $55 billion of plane orders in the pipeline and the world's largest fleet of giant A380 aircraft. Emirates indirectly contributes roughly 40 billion dirhams ($10.9 billion) to Dubai's economy each year, according to Sheik Ahmed.
Running parallel to the rumor that the airline might be handed over to Abu Dhabi has been speculation that Dubai might look to sell shares through an initial public offering and raise billions of dollars in much needed funds for the emirate.
"If Emirates decided to IPO I'm sure it will be good, especially if it's placed within the U.A.E. stock markets," says Sheik Ahmed. "It will see a lot of people trading in it. I will look at it as a positive thing. But as we speak today I don't have any direction from the government to do this."
Educated at the University of Denver, Sheik Ahmed is renowned as one of Dubai's hardest-working royals. Recently, more of his time has been taken up with meetings of the Supreme Fiscal Committee. He reports to Dubai's ruler and U.A.E. prime minister, Sheik Mohammed.
"I've been doing more work for my other responsibilities recently. I feel it's my duty being responsible for the achievement of Dubai," says Sheik Ahmed. "That's why I have to give Dubai my ultimate time doing any job that my boss gives me. I'm giving my time more to what's the most important thing. It's not that the other isn't important, but Emirates is straightforward."
For the time being this means focusing on fixing Dubai's economic problems and helping to restore confidence in a city that has suffered more than any other in the Persian Gulf from both bad publicity and bad management. But, despite these problems and given the lack of reform and opportunity in other Gulf cities like Riyadh, Doha and even neighboring Abu Dhabi, Dubai has not totally lost its luster for investors and the million or so expatriates who make up the bulk of its population. Sheik Ahmed believes that Dubai should look to its past in order to plot a sustainable course for growth in the future.
He says: "Dubai as a place was well known in the region, within the Gulf and the Middle East and the emerging markets mainly due to re-exports, being a logistic hub, tourism—a place to do business from. A lot of countries see that Dubai will continue to be that place for now and even for the future."
Sheik Ahmed says the main aim of the fiscal committee is to get Dubai's economic growth back on track by refocusing efforts on the sectors that were overshadowed by real-estate speculation.
Dubai's core businesses "are logistics, services and tourism and export," he says. "This is what made Dubai move forward, not what happened in the past seven years in opening the real-estate market."
Certainly, Dubai's economic problems were triggered by the bursting of Dubai's property bubble. Prices for newly built villas and apartments are as much as 50% lower than a year ago, while government-owned developers such as Nakheel have flirted with insolvency.
Much of Dubai's real estate was financed with debt, which now must be paid back. Dubai depends heavily on funding from oil-rich Abu Dhabi, which has pumped $15 billion into the emirate since the crisis took hold shortly after Wall Street investment bank Lehman Brothers collapsed in October 2008.
Sheik Ahmed's responsibilities on the committee recently took him to Washington, where he briefed Treasury Secretary Timothy Geithner on the steps that the emirate is taking to restructure the debts of some of its government-owned companies.
But while he concedes that there is plenty of work left to be done he is sanguine about Dubai's economic situation. "Some people think that they're not doing too well because they're taking 2007 as a benchmark, but sometimes we have to realize that you can't always achieve 30% to 40% growth," Sheik Ahmed says. "Now you have to be realistic given what is happening around the world."
WSJ please don't sue me for posting this... :D